BALL AND CHAIN ON INDUSTRY

Southland Times, Issue 25835, 21 November 1945, Page 6

BALL AND CHAIN ON INDUSTRY

CRIPPLING EFFECT OF TAXATION (P.A.) DUNEDIN, November 20. : The president of the Otago-South-land Manufacturers’ Association, Mr G. G. W. Lane at the annual, meeting suggested that crippling taxation had removed the incentive from New Zealand industry. At present, he said, industry, like the old-time convicts, was asked to work hard and fast for mere food and clothes. Manufacturers asked that the ball and chain should be taken off incentive and the way to do that was to adjust wartime taxation to peacetime conditions. The restoration of incentive in industry, manufacturers believed, would aid just as its absence would hinder the speediest reabsorption into industry of persons demobilized from the forces and from war industries. Manufacturers did not ask for any special concession—they asked for “incentive taxation.”

“Individual incentive, provided through prospective personal gain, is the over-riding factor in economic development,” Mr Lane said, “but through Government taxation this incentive can be reduced to a point where enterprise is discouraged and where the individual no longer thinks it worth while to put forth efforts to take the risk necessary to material advancement. Symptoms of this ill are today apparent in New Zealand, both among employers and employed.” Mr Lane said he would give one of many examples where the complete incidence of taxation was concealed. This was a pair of working men’s socks made in New Zealand and retailing to the public at 2/5 a pair. From the time that the wool in these socks grew on the sheep’s back to the time that the socks were sold in the shop the minimum amount of tax involved in their processing was 1/- a pair. In other words were it not for taxation these socks, instead of retailing to the public at 2/5, would have been sold at 1/5.